LONDON (Commodity Online): Chinese copper imports were strong in December, although analysts with Barclays Capital said that they could ease in the months ahead.
According to Barclays, total copper imports hit a record high around 698,000 metric tons, topping the previous record from November of around 660,000. Refined copper imports hit a record 406,937 tons last month, and scrap imports also rose.
“While we believe that the strength of imports into the end of 2011 was driven by consumer demand following the end of end-user destocking, we also believe a portion of these imports went into trader and exchange stock-building,” Barclays said.
Shanghai Futures Exchange inventories increased almost 30,000 tons in December and there are reports that bonded warehouse stocks rose some 75,000.
“In our view, the weakening of the SHFE/LME arb and SHFE time spreads (which are now in a wide contango) and continued build in SHFE stocks in early 2012 suggest that spot demand has been saturated and that imports could fall back during Q1 12,” Barclays addde.
The monthly average Chinese import requirement for refined copper could be 200,000 tons in 2012, half of the December amount.
“That said, even adjusting for stock-building, Chinese refined copper apparent consumption grew very strongly in December (about 37% year on year), which along with the macroeconomic data, should help to alleviate market concerns of a hard landing,” Barclays concluded.
